Why It's Time to Be Optimistic About the U.S.

3/27/2013 11:13AM

The housing market is on the mend, and the corporate sector is flush with cash are just two reasons why the future for equities looks bright. TAMRO partner Timothy Holland joins Markets Hub. Photo: AP.

This transcript has been automatically generated and may not be 100% accurate.

I ... it will recall about the real ... economy all the timing who will skeptical here are the markets of some of us only the clothes maybe ... ah but they all are some hopeful signs if you can look about them ... Tim Holland portfolio manager Cameron ... will like it adhered to ... depreciate the measure ... so you guys you manage two billion dollars in overall there was only enable our clients to buy Skippy of CNN that the economy there you see some hopeful signs death ... of run through some of which are there three or four things that have underpinned ... the move up the last couple years ... and we think this through for things its own cliques begins with a turn in housing ... which had been based on our recent sometime in the back half of two thousand eleven really going last year ... to monetary policy not to shareholders that the ECB the Bank of Japan right ... significantly delevers consumer base in the data we've seen the man of disposable income that goes to debt service ... is at a decades low and that's partly because when the Fed is done in terms of pushing rates ... lower and then you've got now slow but steady ... job creation and you put those four things together ... you know we think and trees don't grow to the sky but things are much better to know where you're going out too much much better than they were two or three years ago ... so the first two percent write about how to use come back to the new talk about the Fed again apologies ... I how much is the second one driving the first year I think I don't know if you can separate the two women clearly lower borrowing costs much lower mortgage rates have ... spurred affordability ... and I don't discount that but that's what the Fed's job is read the full employment and inflation ... and then to ALM ... a big part of what's happened is a supply demand we don't we too many houses the first half of the last decade ... and was the building that he and seventy thousand houses a year just fall down because mean to neglect the household formation population growth ... and new home construction one from about one point four million anyone to believe in two thousand and five in our back ... north of four hundred ... thousand ... so a lot of it was as good ole fashioned supply and demand getting back in balance and I they won the reasons whether cover has been so tepid ... and so disappointing is ... typically real estate leads us ... because the Fed reduces borrowing costs ... that increases affordability new home construction takes off what's different this time around is real estate lenders that mean you had to work through tremendous excess before he sorta bottomed and what was a big and when I think is now a significant ... tail wind and any touches all parts of the consumer economy and ... if he thought about ... another two to related with his ... housing market the consumer to get him consumer debt was very high percentage of it is ... pretty ... too high ... indeed it does come down and ... does that free up money and capital with low rates for people to buy yes and and I think in a relative to history the consumer that number is still high it's much reduced from two thousand and seven words or peeked out ... but a big ... big tackle what is driven and I'm sort of free cash phone spend in the consumer level is the cost of that that ... some people consider rail about what the Fed is doing the manipulating the economy ... on balance a bit of our two percent as it was a six percent ... that differentials inability or parking in so as disposable ... income that goes the dad comes down they can go ... to buying things like washers and dryers in cars in ... a new a new house so lower interest costs have had a ... big deposit impact ... he's come a couple stocks and as we ... share it since we think the US is a pretty good shape and in the consumer is a pretty good shape we've oriented Beau Casson Tem a small cap fund in the into maneuvers for the Khalifa in a more domestic PC industry's financials ... consumer discretionary ... terms of financials would likely surveying Core Small Cap Bancomer Kalispell Montana real estate market are firmly come back while cap allies ... in the hasn't ever diversified equity funds we like AIG it's a bit different stocks of domestic but it's a fantastic ... restructuring and then back on the housing front toll Brothers which also in the into a diversified equity fund what's great about Toll Brothers is its own way and had the ... builder and so is asset price inflation happens as was the place a new one on homebuilders and either ... have a wattle and ... Croat Capital violin ... because an inflation environment that wind is worth more begets more expensive and told ... little E has tens of thousands of lives owned one notch and so they're pretty well positioned if things